Brazil's Senate has approved a £2.9bn financing agreement to purchase 36 Gripen fighter jets from Swedish planemaker Saab.
The deal, reached with Sweden last week, will see the country borrow up to 39.88 billion Swedish crowns from the Scandinavian country's export credit agency SEK for the planes and an additional $245m (£157m) for weaponry for the jets that was agreed in April.
It was rushed through at the request of President Dilma Rousseff's government and despite Brazil's economic difficulties, the borrowing authorisation was backed by opposition parties who said the purchase was of strategic importance for the country's defence.
Brazil had managed to negotiate better terms, reducing the interest rate on the main credit to 2.19 per cent from the 2.54 per cent agreed last year and Interest on the smaller dollar loan was set at 3.56 per cent. Brazil has 25 years to repay the loans with an eight-year grace period.
The contract includes full transfer of technology and the production of 15 of the Gripen NG jets in Brazil. First deliveries will take place in 2019 and Saab plans partner with Brazilian planemaker Embraer to set up a Brazilian assembly line producing the fighter jets up until 2024.
Brazil awarded the contract in December 2013, choosing Saab's fighter over Boeing's F-18 Super Hornet and the Rafale made by France's Dassault Aviation.
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